Earlier this week Uber appealed a California Labor Commissioner ruling against it holding that a driver was misclassified as an independent contractor. In this video, I briefly discuss the ruling and the lesson it holds for employers.
Misclassification of employees as independent contractors can carry many damages and penalties. For example, Sections 226.8 and 2753 of the Labor Code impose a civil penalty of $5,000 to $25,000 depending on whether the misclassification is willful. In addition, the misclassified worker can recover back unpaid overtime wages, unpaid minimum wages, and expense reimbursement. Therefore, employers need to be extremely cautious in classifying workers as independent contractors.
For more information about the factors that differentiate an employee from an independent contractor click here.
The Labor Commissioner’s can be viewed here: